How To Understand Your Pre-Start Variations

Jaimi: Welcome to Home Building Like a Boss, the podcast dedicated to helping first home buyers in Perth build their dream home with ease and excitement. I'm Jamie, your host and go to building broker. Are you ready to feel empowered, in control and excited about your building journey? I'll help guide you with expert advice, insider tips and tricks and real life stories to help you navigate the confusing world of home building.

Let's go. Tune in as I take you on the journey to building your home, like a boss. 

Maddie: Hello, 

Jaimi: and welcome back to another episode. I'm your host, Jamie, as always. And I have Maddie here with me again today and following on from episode a couple of weeks ago, when we chatted about how to prepare for pre start, we'll be touching on.

How to understand your variation once you get it back after your pre start meeting with your builder. So welcome Maddie. Hi, how you going? Yes. Good. All right. And we're also knocking off for Christmas soon. So we're both very excited. Let's start off with some of the main questions you get from your clients regarding their pre start variations.

Maddie: This is a good one. So I would say most of the questions are centered around pricing and it will be, if it's correct, like why Does this look a certain way? What does this pricing involve? Things like that, but it can also range from, okay, what does this product, what does this mean? You've said something here that I don't understand.

So these are, we'll break them down today and tell you, but I would say majority of it is actually stemmed around the pricing itself from the builder. 

Jaimi: Yeah. And how do builders Price this, or how do they work with their pre start variations with recommended retail prices versus what they can get their 

Maddie: hands on?

This is a really big one. So a lot of people get caught up going, okay, well, this basin at Reese is 300. So why are you charging me 700? So a lot of the way builders will price things is in lieu of, so you often see that terminology being thrown out in these items on your pre start variation. And essentially what it means is that that 20 basin that they've gotten from whoever.

It's been credited, and then the new price for the new basin has been tapped on top of that credit. So if you're buying a 500 basin and they're crediting the basin originally that you had for 300, you're getting a price difference of 200 on your variation. So that is where looking at a recommended retail price is not going to do you any good.

It's going to make you very, very confused. And it's often going to probably make you a bit angry. So biggest recommendation, don't look at recommended retail pricing. Because what you will also see and be factored into these items is builder's margin. Obviously the builder has to make money somehow. And also elements of installation and trade pricing.

So that could be whatever the trade has organized the job to be paid for. If there's any extra installation involved. So for example, tiling, there could be more tiling involved. So there's lots of factors to go into pricing. So what you see isn't just a blanket cost for the item itself. 

Jaimi: Yeah. There's lots of other things that you need to factor 

Maddie: in as well.

So many things. That's like, if you see a price, if you don't understand it, just always ask the consultant and they'll be able to hopefully break it down for you. Yeah. When 

Jaimi: clients get their variation back, a lot of them panic, right? Yeah. They panic at the price, they scroll down to the bottom, and the first thing they look for is the price.

Yeah. Standard. It always happens all the time. You'll get your variation back and it'll be way over budget. Yeah. How does it work with when you get your variation back selecting what you want and what you don't want if you've got optional prices and things like that? Let's, yeah, run us 

Maddie: through that process.

Yeah. As a blanket rule, I always tell clients to never scroll down to the bottom right hand corner of your document. It's never a good thing because taking into account, you're not going to go ahead with every single item. If you do, we'd be raising our eyebrows going, are you serious? A lot of these items, again, will factor in options.

So multiple options for the one thing. So the best way to navigate this is to take a breath first, relax, and do it in a setting where you're not feeling rushed and then going through and referring back to your wishlist, your non negotiables, something that you must have that might alter what you might choose.

Elsewhere on your variation. So if your kitchen upgrade is going to be costing you 5, 000, but you've only got a two grand budget, or something's going to be pulled back. So a lot of the times people get a bit confused going, is this it? I can't make changes like I can't add. Can I change stuff on the variation now that it's been done?

Yes, you can. It's all dependent on the builder, but if something doesn't sit right or if something has been missed, you need to speak up and actually ask the question. So referring back to your pre start documents that you did with your consultant. Will help you save money down in the future. Yeah, and 

Jaimi: I think, yeah, a lot of people panic when they get that variation that it's locked in, but it's not locked in until it's not locked in.

You sign off on that variation and you can pick and choose. You can delete, you can add things. You obviously wanna avoid going and adding things back and forth in and out. Estimating an admin because that's gonna add time onto your overall pre-construction. 'cause you're going in and out, in and out, in and out.

So you want to try and do it, you know, sit on it. If you missed some things at pre start, add them in, in one email, five dot points all together in and then out, not five single emails. And then it goes in and then out and then in and then out. So once you've actually combed through it, you can still make changes to it.

And once you sign off on it, that you're happy with the upgrades, the changes and the amount, that's when you're then 

Maddie: logged in. Perfectly said. I think one of the biggest nightmares we have with. Pre starts is, especially as a consultant, when you come in the morning, you see the eight emails over the weekend and you're going, Oh shit, like what's, what's happened.

They've obviously spoken to their friends, brothers, sisters, cousins, dog, and I've got all these new ideas going on. And it's like, Whoa, Whoa, Whoa, Whoa, Whoa, hold up. And I can't even begin to tell you how many times I've had pre start with clients who have changed their mind so many times that neither myself nor the client can remember the original choice.

And what happens then is that clients often get into construction. They walk through their house and they go, that's not what I've chosen. And they start questioning and it's all legit. It's all through the paperwork, but it, things can get lost in translation. Yeah. It gets so, so confusing. So not to mention it becomes so overwhelming.

Like you start to stress out. You're stressing out this consultant consultant stressed for you. Everyone's stressed, minimize how many times you change will result in a much better construction experience and just overall building experience. And everything just becomes a little bit more transparent.

Jaimi: Yeah. What happens once clients have signed off on their variations? What's the next step in the 

Maddie: process? Yes. So, once you sign off on your pre start variations, your consultant will send your documentation. So, what you did at pre start, which will be your pre start plans and your pre start addenda to the drafting department.

So, that's where all your final changes will get made. So there's no point in sending an email to your client liaise or to your consultant and being, Oh, Hey, sorry, can I see this done? It's like, no, no. So that could take a couple of weeks, just depending on how busy the department is. And then once that's all done, it will be given back to you to review.

So it's important to note at this time, once you've signed off on your pre start variation, the trick is to not add more. Cause what will happen is you'll get your admin fee. So people get really confused as to why they implement this. And this is to stop clients from essentially. So, um, 10, 000 variations before they get into construction.

Yeah. So there's a lot of back and forth that goes into the system when it comes to building and pre construction. So when you have signed off on your variations, the ProSign consultant will change your addenda and put all your colors and selections and things in. And then that will also get reflected in drafting.

You can imagine if you add on an extra eight variations, how many times it needs to go into multiple departments. So your pre start department, your estimating department and your drafting department, or because the clients want to get their selection sorted. So that's where that variation fee or that administration fee will come into play.

So it's good to capture everything prior to you signing off on your first pre start variation. Before doing all that sort of stuff, because it's why spend 500 bucks on a pre start variation like as on an annual fee when that could be put towards electrical or that could be put towards your tiling.

Like there's so many better things that you can use that money towards. And 

Jaimi: before you mentioned an addenda, what is an addenda for the people that don't 

Maddie: know? Addendum, it's a technical term for basically a selections booklet. Sorry, it's a legal contract. It's an actual. Contractual agreement between the builder and the client that is showing all their selections, their colors, their fittings, et cetera.

It can basically itemize everything from the type of sand used on your mortar to the color of your tapware to the grout on your tiles. It basically is your one stop shop, your book Bible, basically for your whole house. So if something was, for an example, not correct on that addenda, once it's signed off, it becomes legalized.

So if you've made a mistake, if the builder has made a mistake, it all is contractually signed off on. So the biggest thing with the addendas is to make sure all your colors or your fittings are correct, or your inclusions are stated on there if required. So for example, if you have overhead cupboards, it's just about making sure all those items So.

Stated and ticked off 

Jaimi: and cross checked with your final 

Maddie: plans as well. Yeah. So the pre start consultant would naturally do that once it comes out of final plans as a once over check, but we're all human. We all make mistakes. It's just life. Unfortunately, they are wonder women, but you know, unfortunately everyone has their moments.

So it's always why you should check over your documents once you get them and don't go immediately onto the, Oh my God, they made another mistake. Did it at it. It can happen. Just sit, relax and go, right. Okay. List out an email. Don't send it. Just draft an email, put all your dot points on there. And then once it's all done and checked over, send it across to get checked.

Jaimi: Yeah. It's always important to triple check because yeah, if you sign it off at the end of the day, the build is going to turn around and say, you signed this off. You didn't check it. It's your fault. So the responsibility comes back on you for 

Maddie: signing it off. Definitely. And then that variation fee comes back in.

I want to change it again. Yes. It's a revolving cycle. 

Jaimi: Yeah. Being prepared helps avoid this back and forth in and out, drafting fees, admin fees, and changing your mind, which helps save you money and time on 

Maddie: your overall process. I think the biggest trick as well is there could be a couple of weeks before your plans get given back to you, like all your final documentation gets given.

So don't go chatting to everyone. Don't go here and don't go to your neighbor and go, Oh, I'm having a blue roof. And they go, Oh no, don't do that. Do this. The trick, just be happy with your selections. Feel good and trust your gut. If something isn't sitting well with you, that should have been bought up before you signed off.

It's all it's going to do is cause you unnecessary stress and money. The trick is to just be so happy that no one tells you what not to do or what to do. Yeah. And at the end of the day, it's your house to do what you want. Oh God. Yeah. If you want blue cupboards, you do you boo. Yeah. 

Jaimi: And what is your biggest tip for clients going through their 

Maddie: pre start variation?

Double check your pre start paperwork. Cannot stress that enough. There could be mistakes on the pre start variation. For example, there might not be a PowerPoint listed in a certain place you want it to. By double checking your pre start plans will ensure that everything's accounted for in the variation, which again, minimizes the mistakes and the costly changes after it's been signed off.

So if you haven't got a copy, request it from your consultant and go through it with a fine tooth comb. So go through your plans first and foremost, and then go through your addenda. And that will just ensure that everything has been accounted for. Yeah. And 

Jaimi: how do you then suggest people use their like non negotiable wishlist with this while they're going through it?

Maddie: It really does come, yeah, back down to What you really, really want out of the home. So you need to be strong in your opinions in terms of what you're wanting, sticking with your non negotiables and working around those. So non negotiables are the foundations for what you're going to be choosing in pre start and then everything else on your wishlist is going to be working around that.

And a lot of what I say to clients in terms of how you determine what items you choose and don't choose is what you are prepared to do after handover. What is going to be easiest to do what is also going to be fun to do, like DIYing stuff with your house and doing all these little tidbits and projects makes it exciting, but it can also, if you've got too many, make it overwhelming.

And just frankly, you might not get them done. So it's all about figuring out what you're happy to compromise on, what you can compromise on with the builder. Can you do it after handover? Or if you can't do it after handover, are you happy to not have it at all? Sorry. It's about making sure reaffirming your budgets.

Having a budget there clear as day and crunching the numbers. If you've ticked an item that puts you 2, 000 over, all right, go back, refine, cut that 2, 000 out. 

Jaimi: And what do you think some of the main issues are that arise with clients and their 

Maddie: variations? I would say definitely pricing. Obviously, if clients don't have a set budget, if they are tossing and turning up all their options, if they are undecisive, if they've missed items and they're constantly changing, I think that was probably going to be the biggest issue.

And probably the biggest issue is. I would say transparency. So sometimes the written items on a variation don't, might not explain things well enough. And of course, these people don't work in the industry. So they might not know, yeah, building lingo, huge problem. So they might not know what in lieu of means.

I might not know what an abbreviation for that is. They might not know builders terminology. So, um, I would say that is probably the biggest issues. They've got something written on their variation. They've got no idea what it is, but they might not check it. Or the presale consultant has itemized a code somewhere and they've just gone, yep, cool tick.

And it's like, we'll check the code. Like if you're unsure, like I had an instance really where I had double checked a client's variation and they were priced for a bin that was for a huge bin system. When the bin we suggested was for an under sink bin, which is so small. So they could have saved. 400 if they had checked that first.

So it's definitely going through and making sure that you know, what's on your variation and you understand what's on the variation. So asking the questions, if you really, really are unsure. 

Jaimi: Yeah. And is the pre start variation the only one 

Maddie: clients will receive? No. And this is a common misconception that pre start once it's done, that's it.

You don't get any more variations. That is definitely not the case. So variations are a variation to your building contract, which is done at the sales stage of your building process. And if you change your name halfway through, if you get married, well, guess what? If you've changed all your legal documentation to state that you're a particular different surname, we need a variation to the contract to make sure that that has been done and recorded.

If you change your mind on certain items. Again, new variation. There could also be things in the drafting department. So, as you're going through your final plans, as they are changing all of them to suit, they might find some issues, or they might find a recommendation for something. They also, in their behind the scenes of the pre construction phase, they will submit your paperwork to numerous departments.

The council, engineering, energy departments, certifiers. These are all things that are required to get your bill to site. And these are all things that need to be stamped off on. So if they've taken your plans to the certifier and they've found something, they've had an issue that will need to get recorded on a variation and it might cost you money, it might not.

And then that will need to get signed off on. So there's lots of different ways a variation could come into effect, but it's up to the consultant to properly explain that to you. 

Jaimi: And how do clients pay for their pre start variations? I think there's a huge misconception and some. Builders do it. Red flag.

Um, that you need to pay for your pre start variations on the 

Maddie: day. Definitely not. That is, oh my gosh, huge. Imagine if you had a 40, 000 variation. Like you can't be expected to just go to the bank and go, Oh, hi, I need 40 grand. So it definitely does depend with the builder. So asking the pre start consultant at the time of pre start, Hey, how do we pay this off?

Some builders can do payment plans over the course of construction, where you pay a certain percentage at certain stages, like roof cover, plate height, things like that. Some of them will do a one lump sum, so towards the end of the build around your first PCI, they will be settling all your final accounts, and then they'll ask you, hey, We need your pre start variation in order to proceed with handover.

So it's about making sure to ask the question in order to fully prepare. So just bearing in mind as well, some builders might ask for a basically like proof of payment. So if you've spent 100, 000 pre start, well, the builder might want some reassurance that you can pay that. So they might ask for a bank statement and that's perfectly okay.

It's just to make sure that. You haven't promised the money to somebody else, or you're saving up for it, and you might not achieve that goal by the time Handover comes. So, that's a little tidbit that 

Jaimi: might help some people out. Yeah. Most builders pretty much do ask for that because, yeah. 

Maddie: It's, we've had instances before, especially with the building grants where, you know, people getting given 45, 000 from the government, but yet their mum paid for their deposit for the house.

So, that 45 grand was going to their mum, but they had sent that in as their statement for the builder and then it came hand over and they go, Oh, I can't pay it. And then the builder can't hand over, can they? So it's to say the builder a lot of issues, they ask for the bank statement and that's perfectly, perfectly normal.

Yeah. And 

Jaimi: to wrap us up for today, what is any advice or tips for people going through the pre start and the variation 

Maddie: process? I would say the biggest tip is to get the fundamentals rights that is identifying a budget, sticking to that budget and creating a list of your non negotiables and your wishes, what you want to include and build, but you're happy to keep off if needed.

That's going to set you up to make sure that. Once your variation is in front of you and you're going through all your pricings, that makes you on a set and clear path. And that will give you a much better experience knowing what you've had got included and knowing how much these cost. And don't be afraid to get costs from the builder for things that you might not choose.

So for example, painting is a big one where lots of people get a cost from the builder just to see. It's always good to have that in hands and that way you don't go down the path going, Oh, what if? What if? What if? Minimize that as much as you can, but I would say those three things are definitely the foundations for making sure you have a good pre start experience.

Jaimi: Amazing. Thank you so much for joining me again today. Always 

Maddie: a pleasure.

Jaimi: Thank you so much for tuning in to the Home Building Like a Boss podcast. I hope you enjoyed today's episode and learned something new. Remember, you've got this and I've got your back. Until next time, stay inspired, stay informed, and stay confident. 

Maddie: I can't wait to chat with you on 

Jaimi: the next episode.

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